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DPC suggests split-tariff plan

Renni Abraham

The Dabhol Power Company has proposed a split-tariff proposal to the Centre.

According to a senior government official, DPC has suggested Rs 3.50 per unit for the power generated in phase I to be billed to the Maharashtra State Electricity Board, and a slightly lower tariff of Rs 3.30 per unit for phase II, the offtake of which would be ensured by the Centre.

Enron India chief K Wade Cline made the proposal at the last meeting of the Godbole Committee, held on Tuesday.

The Central government nominee, AV Gokak, was present at the negotiating committee meeting for the first time.

Sources said Gokak's brief was to listen to all proposals and come back with the Centre's response at the panel's next meeting, scheduled for the coming week.

The Union power ministry is said to be favourably disposed to the split-tariff idea whereby central utilities have to pay a lower tariff.

According to the present power purchase agreement, the obligation for ensuring offtake of 90 per cent of the 2,184 mw of power generated by both phases of the project is on the MSEB.

Since the MSEB has already stated that it can only absorb the power from phase I, it has become inevitable that the Centre intervenes and ensures offtake of power from phase-II.

In order to ensure this, the Centre is seriously pursuing a multiple solution for the 1,444 mw of additional power that would become available after phase II is commissioned.

The Centre could get the National Thermal Power Corporation to lift 500 mw, the Railways which is a high tension consumer of power from the Central Grid to offtake 300 mw, Power Trading Corporation to trade 200 mw of power while providing credit support for some central government agencies to purchase the remainder.

The DPC proposal is rooted in the logic that a tariff reduction would not be possible unless offtake of power from the Dabhol project is maintained at 90 per cent plant load factor (PLF).

At this PLF level, the DPC estimates the cost of power to be pegged at Rs 3.50 per unit by December 2001 when the project would shift to liquefied natural gas as fuel, Rs 3.70 by 2002 and Rs 3.91 by 2003.

This tariff would only be maintainable provided the price of crude oil remains in the range of $25 per barrel, the exchange rate is pegged at Rs 47 per dollar and a 90 per cent PLF is maintained.

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